The delivery of the checks in question by the defendant Albert E. Sager to the plaintiff’s agent Sherwood did not of itself constitute payment. The question is whether or not the checks constituted payments when actually paid by the bank upon which they were drawn.
Where a person is an agent with authority from his principal to collect principal and interest, the general rule is that a payment by a debtor to such agent, to constitute a good payment, must be made in cash. The reason for this rule is that a payment in any other medium is not as good as cash — is not the exact equivalent of cash. Thus it has been held that the giving of a note, mortgage, postdated check, property, etc., does not constitute a payment because the acceptance of those things by the agent exceeds his authority and constitutes the exercise of a discretion by the agent not vested in him by his principal.
It would seem, however, that this court should take judicial notice of the fact that checks and drafts are usual and ordinary means of transacting business and transferring money in all business transactions; that, where an agent is given authority to collect money, the authority granted implies that he shall *329do so in the usual and ordinary way and, where a check is given by the debtor, not post dated and payable at a bank in the same city, the giving of such check payable to the agent constitutes payment from the time that such check is cashed in due course. ■
“ Power to employ all the usual and necessary means to execute the authority with effect is an incident of every contract of agency.” (Lawson Cont. [2d ed.] 227, § 184.)
Such a check, of course, would not constitute payment if not in fact honored on presentation in the ordinary course of business. The agent could not accept such a check in absolute payment and satisfaction. He can, however, receive a check which he has reason to believe will be honored upon presentation as a convenient and customary way of obtaining the money which he is authorized to collect. Such a payment offers no greater temptation to the agent than the payment of the money would offer. If the check is paid by the bank, then the agent has received what he was authorized to receive, and, if not paid when presented, the creditor has lost nothing. The reason for the rule which does not permit a payment to an agent by note, mortgage, etc., does not apply when payment is made by a check which is actually cashed by the bank upon which it was drawn. The cases where checks were made payable to the principal and wrongfully indorsed and collected by the agent have no application, as in those cases they were not paid in due course.
There are several decisions in this State which sustain this position. (Hunter v. Wetsell, 84 N. Y. 549; Cohen v. O’Connor, 5 Daly, 28; affd., on opinion below, 56 N. Y. 613; Thomas Roberts Stevenson Co. v. Fox, 19 Misc. Rep. 177; Mores v. Society for the Protection of D. R. C. Children, 19 Wkly. Dig. 247; Prochowick v. Boyd, 15 N. Y. St. Repr. 809; affd., 119 N. Y. 641. See, also, Griffin v. Erskine, 131 Iowa, 444.)
Payment on the checks in question was made in due course. Section 148 of the Negotiable Instruments Law (Consol. Laws, chap. 38; Laws of 1909, chap. 43) reads as follows: “ Payment is made in due course when it is made at or after the maturity of the instrument to the holder thereof in good faith, and without notice that his title is defective.” (See notes to this *330section in Crawford’s Ann. Neg. Inst. Law [4th ed.], pp. 162, 163; Glennan v. Rochester Trust & Safe Deposit Co., 152 App. Div. 316; affd., 209 N. Y. 12.)
The two checks in question, when cashed by the bank upon which they were drawn, constituted payments upon the mortgage and should have been allowed as such by the Special Term. ¡
The judgment and order should be reversed, with costs.
íi
All concurred, Kruse, P. J., in result upon the ground that the checks, having been paid, were equivalent to cash and effective as payments upon the bond and mortgage, though misappropriated by the agent who received the same, and the proceeds wrongfully converted to his own use, except Lambert and De Angelis, JJ., who dissented in a memorandum by Lambert, J.